Judge: Colin Leis, Case: 22BBCV00395, Date: 2022-08-31 Tentative Ruling

Case Number: 22BBCV00395    Hearing Date: August 31, 2022    Dept: 3

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

MOVING PARTY:                Defendant Bank of America, N.A.

RESPONDING PARTY:       N/A

Demurrer to Plaintiff’s Complaint

The court considered the moving papers filed in connection with this motion. No opposition was filed. The court also considered the joinder filed by Defendant Select Portfolio Servicing, Inc.  

BACKGROUND

            Plaintiff Eva Yu Neumann filed this action on May 27, 2022, against, among others, Defendants Bank of America, N.A. (“Bank of America”) and Select Portfolio Servicing, Inc. (“SPS”) to prevent the foreclosure of Plaintiff’s home, located at 661 W. Lemon Ave., Arcadia, California 91007 (the “Property”). The complaint asserts causes of action for (1) violation of Homeowner Bill of Rights – single point of contact; (2) violation of Homeowner Bill of Rights – dual tracking; (3) negligent misrepresentation, and (4) violation of Business and Professions Code section 17200.

Bank of America demurs to all causes of action of the complaint on the basis that each fails to state facts sufficient to constitute a cause of action. SPS joins Bank of America’s demurrer in its entirety.  

REQUEST FOR JUDICIAL NOTICE

            The court grants Bank of America’s request for judicial notice as to Exhibits 1 through 10.

DISCUSSION

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

In the complaint, Plaintiff alleges that on or about July 13, 2007, she obtained a loan secured by the Property in the amount of $150,000 with Bank of America (the “Loan”). (Compl., ¶ 11.) The Loan was junior to a first priority deed mortgage held by Bank of America. (Compl., ¶ 12.) The Loan was serviced by SPS, and on or about December 17, 2019, SPS recorded a Notice of Default on the Loan. (Compl., ¶ 16, Ex. C.) Plaintiff alleges that the balance on the Notice of Default was inaccurate and contacted SPS to dispute the amount that SPS claimed was owed. (Compl., ¶¶ 16-17.) At the same time, Plaintiff sought a loan modification from SPS, which was eventually denied on January 25, 2022. (Compl., ¶¶ 17, 26.) Plaintiff filed for bankruptcy protection on January 4, 2021. (Compl., ¶ 18.) Throughout this period, SPS continued to send account statements to Plaintiff that reflected inaccurate balances. (Compl., ¶¶ 19-23.) As of the filing of the complaint, a foreclosure sale of the Property was scheduled for June 6, 2022. (Compl., ¶ 27.)

The demurrer to the first two causes of action for violations of the Homeowner Bill of Rights (“HBOR”) is sustained because, as Bank of America correctly notes, the HBOR does not apply to junior liens or lines of credit. (Civ. Code, § 2924.15, subd. (a); Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 921 [“Because the loans at issue in this case were junior loans—the second and third loans that plaintiff secured using the Property as collateral—HBOR does not apply.”].)

The demurrer to the third cause of action for negligent misrepresentation is also sustained because of the lack of specificity required to state such a claim. Plaintiff alleges generally that the defendants made misrepresentations to her about her loan arrearages and the reason why she was denied a loan modification. (Compl., ¶¶ 51-53.) But there are no specifics regarding misrepresentations made by either Bank of America or SPS. It is well-settled that fraud must be pleaded with particularity. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) The “particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’” (Ibid. [emphasis in original].) Likewise, “[e]ach element in a cause of action for . . . negligent misrepresentation must be factually and specifically alleged.” (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519.)

Finally, Plaintiff bases her unfair competition claim (Business and Professions Code section 17200) on the alleged HBOR violations and the negligent misrepresentations discussed above. Because the causes of action on which the unfair competition claim is based must fail, the court finds that the unfair competition claim also fails.

CONCLUSION

Based on the foregoing, the court sustains the demurrer by Bank of America and SPS to the first two causes of action alleging violation of the Homeowner Bill of Rights, without leave to amend. The court also sustains the demurrer to the third cause of action (negligent misrepresentation) and fourth cause of action (violation of Business and Professions Code, section 17200), with leave to amend.

The court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of the date of this order. If no amended complaint is filed within 20 days, the court orders Bank of America and SPS to file and serve a proposed judgment of dismissal within 30 days of the date of this order.

Bank of America is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 31, 2022

_____________________________

Colin Leis

Judge of the Superior Court